City official’s email is called key in ‘pay-to-play’ suit

In late April of 2009, a top aide to Mayor Byron W. Brown wrote an email updating his boss on a $12 million East Side housing project.

The aide told Brown that the project was ready for Common Council approval except for one outstanding issue – the Rev. Richard A. Stenhouse and a still-unsigned contract.

His email also indicated that a lawyer for NRP Corp., the project developer, was prepared to do whatever it took to resolve the issue and move the deal forward.

“He said his client knows what to do, will do it and Rev. Stenhouse will call (the) mayor should that contract be signed,” then-Economic Development Commissioner Brian Reilly said in the email to Brown and former Deputy Mayor Steven M. Casey.

NRP’s lawyers say the email, disclosed as part of their 3-year-old civil suit against Brown and the city, proves their core allegation – that Brown ran a “pay-to-play” scheme at City Hall.

They also think that it refutes Brown’s contention that he stopped the project because of concerns about its scattered-site, rent-to-own strategy, as well as other issues.

“Mr. Brown’s only reason to kill the project was the failure to find a paid role for Rev. Stenhouse,” the lawyers say in court papers.

The email, which has been portrayed by NRP’s lawyers as a smoking gun of sorts, is the latest development in a lawsuit that accuses Brown of conspiring with others to scuttle the housing development. The suit alleges that Brown killed the deal when the Cleveland developer refused to give Stenhouse an $80,000 service contract.

From Day One, Brown has denied the allegations of corruption, suggesting that his opposition was rooted in public policy concerns.

His lawyers say Reilly’s internal email, as well as a second email from him, don’t come close to saying what NRP contends that they say.

The mayor also countered with his own allegations of delay.

“To the extent the emails mean anything, they reflect our position that NRP and its agents were trying to persuade Rev. Stenhouse to join their team,” said defense lawyer Terrence M. Connors.

NRP, in its response to the city, accused it of purposely withholding and concealing damaging emails.

The city, according to the developer, tried to hide the Reilly emails in a digital collection of 1,200 pages of documents. NRP says the emails were among the last in the collection.

Nelson Perel, a lawyer for the developer, says the city’s tactics are part of a larger delaying strategy that includes a refusal to answer the most basic questions concerning the mayor’s and Casey’s roles with Stenhouse.

“Are they trying to prolong the day of reckoning? We don’t know that,” Perel said.

In the eyes of NRP’s lawyers, the emails are significant. They see them as proof of Brown’s willingness to go forward with the NRP project, but only if Stenhouse is given a paid role in it.

“They suggest that the paper work is ready to go,” Perel said of the memos.

“The only condition it appears is the mayor waiting for a call from Stenhouse.”

The second memo is a March 2009 email from Reilly to Casey and two other city officials. In it, Reilly says the city is prepared to move forward with a request for federal housing funds for the NRP project.

Perel says the email confirms that Brown, despite his public comments to the contrary, was ready to sign off on the NRP contract.

Connors disputed NRP’s take on the emails and suggested that the developer’s complaints about delays are much ado about nothing.

“These emails were produced as part of a relatively, small production,” he said. “We assumed the lawyers would read them. If they were hidden, they were hidden in plain sight.”

Both sides have filed legal papers asking U.S. Magistrate Judge Leslie G. Foschio to compel the other side to move more quickly in producing requested documents and information. They will appear before Foschio on Wednesday to argue the issue.

“We have produced over 30,000 documents, but we are still waiting for NRP to produce the basic documents that establish their right to even file a lawsuit,” Connors said.

Perel says his client is still missing key documents, including the NRP “file” that Reilly refers to in one of his emails. He thinks the file may contain more evidence of Brown’s support for NRP.

“The Reilly email seems to confirm the mayor’s readiness to move the project forward,” he said.

Perel also noted that despite the large number of documents produced by the city, the two Reilly emails were not handed over until last month, and only after NRP filed its motion to compel with Foschio.

Stenhouse, a well-known and influential minister, has his own record of development on the East Side as head of the Jeremiah Partnership, his church’s faith-based development company. He also was a defendant in the suit until he settled with NRP for a reported $200,000 in early 2012.

“The Rev. Stenhouse never demanded, required or in any way insisted on a contract with this project,” said Daniel C. Oliverio, lawyer for Stenhouse.

NRP’s case has its roots in a housing project that was supposed to result in 50 rental homes in the Masten and Cold Spring neighborhoods.

In early 2009, the project stalled when Brown refused to transfer to NRP the land the city had set aside for the development. The mayor also declined to give NRP the funding that previously had been approved by the city.

At the time, Brown said he was uncomfortable with the project, in part because of a requirement that the rental housing not be sold for 15 to 30 years.

When the project stalled, NRP filed suit in federal court.

In July of 2012, the federal judge overseeing the case allowed the civil suit to continue but dismissed some of its allegations, most notably concerning breach of contract.

In ruling both for and against the city, which was seeking to dismiss the suit, Chief U.S. District Judge William M. Skretny found enough legal reasons for the case to stay alive.

Chief among them are the racketeering allegations by NRP Corp., which Skretny said he found “plausible.”